Tiger Brands
Mac Dougall says Tiger Brands has sights set on being a growth company.

JOHANNESBURG, SOUTH AFRICA — While offering scant details of its future intentions, Lawrence Mac Dougall, group chief executive officer of Tiger Brands Ltd. described the Johannesburg, South Africa-based company as “a growth company” during a recent conference call to discuss fiscal 2016 results.

Mac Dougall at the outset of the Nov. 23 conference call said the company would not be sharing any significant updates about what is coming out of a strategic review currently under way. He called it “an extensive review of our business, of our structures and our capabilities to be able to understand exactly what we need to execute our agenda for the future.”

Details of the review are not expected to come until April or May, but pressed by an analyst during the call to divulge whether the company’s energies would be focused more on divestments and streamlining the portfolio or on acquisitions, Mac Dougall responded, “I did say we’re not going to share that with you today, but, let me give you a sense.”

Tiger Brands Lawrence MacDougal CEO
Lawrence Mac Dougall, group chief executive officer of Tiger Brands Ltd.

“Tiger Brands is a growth company,” he said. “We have great opportunities for growth, not only within the segments where we currently participate, and I said with some fairly high shares, but also within the broader geography that we participate in. When you look at our brands and you look at their current footprint from a geographical perspective, there are great opportunities for expanding our current portfolio.

“Yes, we’re looking at each of the segments. We’re looking in each of our brands and where their role is going to be in the future; and how much we are going to have to invest behind those; and therefore, what it looks like.

“It’s too early to share that with you now, but underlying we are a growth company. We cannot shrink to greatness. So it’s not going to be divesting to get the profit margins up; we want to grow. We want to grow in the local market and we want to grow internationally, and that’s what we’ll share with you when we get to that point.

“So, yes, we might have to look at where do we focus? My philosophy is clearly around distortion around power brands. Therefore, understanding the role of each of those brands in the segments we participate is the work we're doing now. But we need to understand, do they give us leverage in terms of growth within the segment or geographical? Or if not, are they higher margin? They can hold their positions and, therefore, they will continue to get investment, because they’re too big to fail.

“We’re answering those questions as we go through now, but I can’t share more than that with you, but we are a growth company.”

Tiger Brands Ltd.’s profit before tax for the year ended Sept. 30 increased 10% to R4.5 billion ($316 million) due to strong performances in groceries, beverages and home care. Grains experienced a marginal decrease because of significant declines in maize (corn).

Total earnings per share, including discontinued operations (TBCG), increased 90% to 2,034 cents, up from 1,068 cents a year ago. Group turnover from continuing operations increased 11% from R28.7 billion to R31.7 billion.